Education

• Questions & Answers
• Articles

Interest free student loans

Student loans are now interest free for borrowers living in New Zealand. Eligible borrowers have been entitled to a write-off of all the interest charged on their loan from 1 April 2006. "Generally, to be eligible for an interest free student loan, you will need to have lived in New Zealand for 183 or more consecutive days (about six months)," Andrew Minto, Inland Revenue National Manager, says.

"You will continue to see interest charged on your Inland Revenue and Study Link student loan statements. However, as long as you are eligible for an interest free student loan then all the interest that's been charged from 1 April 2006 will be written off after the end of each tax year (31 March)," Mr Minto says.

"It is important to remember that only the interest charged from 1 April 2006 will be written off - interest free student loans do not cover interest charged before this time."

Key points

• From 1 April 2006, student loans are interest free for borrowers living in New Zealand for 183 or more consecutive days (about six months) - whether they are studying or not.
• You'll continue to see interest charged on your student loans statements sent to you by Inland Revenue and StudyLink.
• If you're eligible for an interest free student loan, you don't need to do anything. All interest charged from 1 April 2006 will be written off automatically at the end of every tax year.
• Even if you don't satisfy the 183 day requirement, you could qualify for an exemption, which would also make your loan interest free. You'll have to meet certain conditions and provide proof to support an exemption application.
• Interest free student loans do not cover interest charged before 1 April 2006.
• For more information, check out www.ird.govt.nz/studentloans

Visit |Email this